Scottish meals & drink: Inflation and DRS thwart sustainable ambitions

In a survey of greater than 100 companies by Johnston Carmichael, 70 per cent reported their “sustainability plans have been negatively impacted” by inflation. The accountancy agency’s annual Meals&Drink report discovered the rising value of power and uncooked supplies, and the implementation of Scotland’s DRS scheme in August, are among the many high challenges presently confronted by companies.

Fierce Beer founder Dave Grant, who took half within the survey, defined the severity of the influence in latest months.

“Being as sustainable as attainable has been a precedence of our enterprise because it was based in 2015,” Mr Grant mentioned. “However the actuality is that our plans to realize internet zero have successfully been placed on maintain in latest months due to the present financial local weather.

READ MORE: Craft brewer eyes international enlargement with funding

“It’s actually unlucky, however till the broader state of affairs reveals indicators of enchancment, we merely can’t afford to spend important money and time on progressing sustainability tasks, nevertheless vital they could be.”

One other drinks firm requested concerning the difficulty replied: “We don’t have a sustainability plan. Proper now, our plan is to remain in enterprise.”

Two-thirds of corporations interviewed had been based mostly in Scotland, with the remainder from elsewhere within the UK.

“The journey to internet zero is essential for the trade, however it’s clear that for a lot of the problem of rising inflation has negatively impacted these goals, and a few have even felt they’ve needed to shelve these plans in the interim,” mentioned Adam Hardie, head of foods and drinks at Johnston Carmichael.

HeraldScotland: Adam Hardie of Johnston CarmichaelAdam Hardie of Johnston Carmichael (Picture: Johnston Carmichael)

“Regardless of this, it’s reassuring to see there’s nonetheless an actual positivity round this resilient sector because it appears to be like to the longer term.”

A complete of 59% of companies mentioned they had been optimistic or very optimistic about their agency’s future progress.

Nonetheless, three-quarters reported that inflation can be impacting relationships with their clients and suppliers. Greater than half mentioned they’d seen their largest value will increase in uncooked supplies, adopted by power prices and labour.

Allan Wilkinson, head of agrifoods HSBC, mentioned double-digit inflation throughout the sector has in some cases led to sustainability plans being ship “at higher tempo” than would have in any other case been the case.

READ MORE: Brewgooder, Fierce, Williams Bros’ brewing link-up

“The inflation which commenced in mid-2021 is of such a magnitude, that many companies have determined that focussing on the [day-to-day] necessities and their very own survival eclipsed long-term objectives together with their sustainability methods and motion plans,” mentioned Mr Wilkinson, whose firm was a supporting accomplice within the Meals&Drink report.

“As time has moved alongside, companies have made two observations. Firstly, that this inflationary interval is way from over and will effectively exist for fairly some time but, and secondly that plans to drive effectivity to mitigate value will increase have delivered motion in direction of decreasing their carbon footprint, which in flip takes them again to their very own sustainability ambitions within the first place.”